In case the stock market (S&P 500) performance over the last 12 months wasn’t obvious enough, the most recent individual investor sentiment survey has confirmed that investors are net bullish on the market. Investors are the most bullish they’ve been since 2021 at the height of the meme stock craze, poll data came in at +21.8 which indicates a net bullish view.
The good news is that market participants have less to worry about today than they did in 2021, the market isn’t nearly as expensive as it was back then. Companies are expected to produce larger revenues and profits over the next 12 months and that is likely translate into higher stock prices. This is because share prices tend to correlate well with positive earnings reports when individual investor sentiment is net bullish. The larger the net bullish figure, the higher the correlation, as investors feel comfortable pushing prices higher when valuations are fair.
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